On Tuesday, Axelar Foundation published a detailed blog post summarizing the features of the AXL token — what it is used for on Axelar network, and how benefits accrue to the tokenholders and validators who use the token to provide services supporting the network.
The AXL token is scheduled for release at the end of September.
The full blog post is here. Below are a few of the key points, which also act as a summary of the benefits of using a blockchain in cross-chain communication: much of the robust security and feature-rich logic described here cannot be achieved by other cross-chain systems.
Axelar is a blockchain that connects blockchains. To do this securely, Axelar network uses battle-tested proof-of-stake consensus. Network validators produce new blocks, participate in multiparty signing and vote on external chain states. Tokenholders stake the AXL token, delegating tokens to a validator’s staking pool and receiving rewards, minus the validator’s commission.
The AXL token is used for governance, allowing stakers to exercise governance over proposals, such as a parameter change or protocol upgrade.
AXL is used to pay network transaction fees to validators and tokenholders, but users of the Axelar network do not need to hold the token. Conversions into AXL tokens and destination-chain tokens are handled on the back end, so that users need only pay gas once, in the source-chain token.
Axelar network rewards are “inflationary” — they increase the total supply of AXL — but there is potential for supply to become deflationary based on the transaction fee mechanic described above. If there is change from conversions and fee payments on other chains, that change may be partially refunded to users and/or used in buyback-and-burn programs.
Please read the full post, The AXL Token & the Cross-Chain Future.
If you’re expecting to be a tokenholder, once the token goes live, please visit our page aggregating information for tokenholders. There, you will find tutorials for Cosmostation, Ledger and Keplr wallet set-up, plus guides to staking and bridging native AXL to and from other blockchains.